State retirees angry about dental insurance hikes

Monday

Aug 31, 2009 at 12:01 AMAug 31, 2009 at 2:28 AM

Retired state workers are angry, but Gov. Pat Quinn’s administration still plans to impose modest monthly premiums for retiree dental insurance beginning Oct. 1. The plan will save the state $12 million a year, officials say. Until now, state retirees didn’t have to pay premiums for dental coverage. The new premiums — $11 monthly for members, $17 for a member and one dependent, and $19.50 for members plus two or more dependents — are the same amounts paid by active employees.

“People are literally sticking their hands in my pocket and taking money without my permission,” Dennis Russell, 56, a Springfield resident who retired from the state in 2005, said Friday. “It’s just not right.”

Alka Nayyar, spokeswoman for Quinn’s Department of Central Management Services, said imposing dental premiums on retirees is “one of the many tough decisions the governor has had to make to help cut costs and get the state’s financial situation back on track.”

Until now, state retirees didn’t have to pay premiums for dental coverage. The new premiums — $11 monthly for members, $17 for a member and one dependent, and $19.50 for members plus two or more dependents — are the same amounts paid by active employees.

76,000 affected

Retirees must notify the state by Sept. 18 if they want to drop their dental coverage. The premiums will affect about 76,000 state retirees, their dependents and survivors nationwide. Figures for Illinois itself were unavailable.

In addition to those enrolled through the State Employees’ Retirement System, people affected by the new premiums include retired university employees, judges and lawmakers. Downstate teachers also are covered by a state pension arrangement, but they do not have dental coverage.

Council 31 of the American Federation of State, County and Municipal Employees, which represents or used to represent the largest chunk of retirees affected by the change, believes new premiums must be bargained.

AFSCME has filed a grievance against the premiums, but it’s unclear whether that will prevent the premiums from taking effect.

“The union had no warning of this policy change, and we will use contractual, legal and other tools to attempt to reverse this action by the Quinn administration,” Council 31 executive director Henry Bayer said in a statement posted on AFSCME’s Web site.

Nayyar said CMS will respond to the grievance in the “proper forum.”

Promises not kept

Christine Groves, 62, a Springfield resident who retired from the Department of Revenue, said state officials made promises during meetings with workers who were considering early retirement in 2002.

“They said our benefits would never change,” she said. “That was repeated often. That was part of the bill of goods that was sold to get us to leave.”

She said the planned dental premiums are “not a lot of money,” but could pave the way for more efforts by state officials to erode retiree benefits.

Nayyar wouldn’t address Groves’ allegations about any promises made in 2002, when Republican Gov. George Ryan was in office.

Nayyar said the dental premiums will “bring in additional revenue while equalizing the costs borne between active and retired members or their survivors.”

Russell, a former CMS information-systems analyst, responded: “Excuse me, but I’m not a state worker anymore. When we retire, we figure all of those benefits, and that’s a major consideration on whether we can afford to retire or not.”

Russell and Groves said in separate interviews that the premiums wouldn’t be a financial hardship for their families, but might strain some retirees’ budgets.

Premiums a surprise

The premiums were a surprise for retirees who were informed through letters from the state in recent days.

Earlier this year, Quinn proposed a range of state health-insurance cost increases — some of them steep — for active employees and retirees to help resolve what now is considered to be a $5 billion budget deficit for fiscal 2010.

But the governor later dropped that plan. The dental premiums for retirees weren’t part of that plan, which never received a vote in the General Assembly.

State Sen. Larry Bomke, R-Springfield, said his staff is fielding complaints from retirees about the dental premiums. Bomke said he sympathizes with them, but doesn’t want to criticize Quinn for trying to deal with the fallout of a lingering national recession.

“He’s got a tough decision to make,” Bomke said.

The dental premiums are modest compared with those paid by most area workers and retirees outside of state government, according to employee-benefits consultant Drew Davis, president of Davis Financial Group in Springfield.

If dental insurance is offered at all, most private-sector employees and retirees pay up to four times more than the state premiums, Davis said, adding that the state dental plan is “pretty attractive” in terms of the services covered and levels of coverage.

Dean Olsen can be reached at (217) 788-1543 or dean.olsen@sj-r.com.

Payment delays

Without a tax increase or some other new revenue source, dental and many medical bills for state workers and retirees could take as long as 13 months to be paid, a state spokeswoman said.

“The state is desperately in need of new revenue sources if we’re going to be able to make sure that claims are paid on time,” said Annie Thompson, spokeswoman for the Illinois Department of Healthcare and Family Services.

The state’s ongoing fiscal crisis has resulted in delays of up to six months in paying health-care claims processed for the state by Philadelphia-based Cigna Corp., she said.

Because the state budget for the fiscal year that began July 1 underfunds state health coverage by $600 million — or 46 percent — delays in paying all medical and dental bills through Cigna are expected to increase to 400 days as the fiscal year goes on, Thompson said.

State government is considered “self-insured” for the health-care bills it pays through Cigna. Cigna processes claims for the state and doesn’t provide its own health insurance.

As a result, the state has more power to slow down the payment cycle and stretch limited state tax dollars, Thompson said.

It currently takes in-network Cigna providers six months to get paid. The average delay for out-of-network Cigna providers is eight months, and the average delay in paying dentists is three months, Thompson said.

Of the 189,000 state workers, retirees and dependents covered by state-funded health coverage plans, 82,000 people — the largest single chunk — have their medical bills paid through Cigna.

The rest receive coverage through insurance products purchased by the state from companies and organizations that include Health Alliance, Personal Care, Blue Cross and Blue Shield of Illinois, Humana, UniCare and HealthLink, Thompson said.

At least for now, the state has been able to continue monthly premium payments to those groups, and claims filed by those groups have been paid on a more timely basis than Cigna claims, Thompson said.

--Dean Olsen

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